Sale of state property for one base value. Advantages and difficulties

It is no secret that in order to involve unused state property in economic circulation and attract buyers to acquire such assets, a legal norm has been developed and successfully applied in practice, which provides for the sale of real estate at auction with an initial sale price equal to one base value.

Irina Shkirando – Head of the State Property Utilization Sector of the State Property Committee of the Vitebsk Regional Executive Committee

It should be noted that this type of transaction has its pros and cons. On the one hand, this method of selling real estate objects that are not in demand by state legal entities in their economic activities is attractive due to the low cost of the item for sale. On the other hand, a significant number of such objects are located in remote rural settlements and are not always in satisfactory condition, and therefore require investment. In addition, the right granted by the legislator to sell state property in its actual condition will require buyers to make certain efforts to formalize the title documents for the acquired real estate.

When carrying out this type of transaction, further events develop according to two scenarios.

In the event of a favorable transaction, which occurs when buyers consciously decide to acquire capital structures for one base value, the property finds its owner and gets a new life. A number of objects are transformed, jobs are created in areas that have sometimes stood idle for years, production is launched, and other activities are carried out. Thus, as of today, 157 sale and purchase agreements are under control, where the mandatory condition is the use of the acquired property in activities; for 28 such agreements in 2024, district executive committees have made decisions on the full fulfillment of conditions, 19 agreements have been terminated due to the buyer's failure to fulfill their obligations (9 by court decision).

The second most in-demand sales condition is the conversion into residential premises. This type of transaction resolves an equally important housing issue. Currently, 39 sale and purchase agreements are under supervision, with the mandatory condition of conversion into residential premises. For 25 such agreements in 2024, district executive committees have made decisions on the full fulfillment of conditions, and only 6 agreements have been terminated due to the buyer's failure to fulfill their obligations (2 by court decision).

Unfortunately, another outcome of events occurs when buyers acquire unused property solely due to its low cost, without having real plans for its further use or sufficient funds for renovation, organizing economic activities on its premises, or converting it into residential premises.

Furthermore, buyers do not attach due importance to the fact that penalties are provided for non-fulfillment of contractual obligations in the form of paying the difference between the appraised value of the property acquired on a compensatory basis, effective as of the date of the decision on its alienation, increased by the producer price index for industrial products of industrial-technical purpose, and the purchase price of this property. The sale and purchase agreement is terminated in this case, and the property is subject to return to state ownership, including taking into account the inseparable improvements made by the buyer (acquirer) without compensation for their cost. It should be noted that the amount of penalties is usually quite significant (measured in thousands, or even tens of thousands of rubles).

Another feature of this category of transactions is the obligation of property sellers and management bodies, under whose subordination (in the system) the property sellers are, to monitor the progress of buyers fulfilling their obligations.

This issue is under the constant control of the committee. Special attention is paid to properties whose buyers do not begin to engage in economic circulation immediately after the completion of the registration of title documents (registration of the sale and purchase agreement, registration of the transfer of ownership of the acquired property).

In order to exercise control in this area, the committee has instructed the city and district executive committees to ensure quarterly inspections of capital structures sold with conditions and, if necessary, to work on compelling buyers to fulfill their obligations or to propose considering the issue of voluntary termination of the sale and purchase agreement before the control period expires to avoid the imposition of penalties.

Buyers are very reluctant to return acquired property to state ownership, and more often petition for an extension of the deadline set for the fulfillment of the sale condition, citing objective circumstances. It should be noted that local Councils of Deputies, wishing to support small and medium-sized businesses, as well as citizens who have acquired property for the purpose of converting it into residential premises, make positive decisions based on the results of considering incoming applications.

The committee recommends that all property owners responsibly approach their owner's obligations in order to avoid losing their acquisition and good mood later.